Citizens Band Radio Transceivers Letter to the Speaker of the House and the President of the Senate Transmitting a Report.

Dear Mr. Speaker: (Dear Mr. President:)

In accordance with section 203(b)(1) of the Trade Act of 1974, enclosed is a report to the Congress setting forth my decision to modify the import relief recommendation of three Commissioners of the U.S. International Trade Commission (USITC) by proclaiming a moderate tariff increase for Citizens Band (CB) Radio Transceivers and giving the reasons for my decision and why the import relief recommended by the USITC is not in the national economic interest.

Sincerely,

JIMMY CARTER

STATEMENT BY THE PRESIDENT

As required by section 203(b)(1) of the Trade Act of 1974, I am transmitting this report to Congress setting forth the actions I will take with respect to citizens band (CB) radio transceivers covered by the affirmative injury finding of the U.S. International Trade Commission (USITC) reported to the President on February 3, 1978, under section 201(d) (1) of the Trade Act. As my decision provides import relief which differs from the action recommended by the USITC, I am setting forth the reasons for such difference.

After considering all relevant aspects of the case, including those considerations set forth in section 202(c) of the Trade Act of 1974, I have determined that neither of the recommendations of the USITC are appropriate in this case. I have, however, determined that import relief is in the national economic interest and therefore will proclaim a tariff increase with respect to citizens band (CB) radio transceivers (except hand-held), of 15 additional percentage points in the first year, to be phased down in three percentage point decrements for the following two years. The duty will then revert to its current rate of six percent ad valorem.

Expedited adjustment assistance would be ineffective in helping the industry cope with current problems of severe inventory overhang, low prices, and financial losses.

The import relief recommended by the USITC of a 30 percentage point tariff increase is not in the national economic interest because it would substantially increase costs to consumers. In a time when we are striving to control inflation, this cost would be too high.

The moderate tariff increase over a three-year period that I will proclaim will have a much smaller price effect than the 30 percentage point added duty over a five-year period recommended by the USITC. Furthermore, CBs are a final consumer good precluding ripple price effects on other goods.

The moderate tariff increase, when coupled with the recent appreciation in the Japanese yen (about 25%), would enable domestically produced CBs to be competitively priced relative to Japanese imports. Japanese imports represent about 85% of the total. The Republic of China and Korea and Hong Kong supply almost all the remainder (14%). Domestic manufacturers may be able to expand their share of the market. This could be achieved by utilizing their already developed, but now excess, capacity.

Firms and workers and communities would remain eligible for adjustment assistance.

JIMMY CARTER

The White House,

March 27, 1978.